By Charles Kakamwa
The continuous drop in the purchase price of sugarcane by millers has caused worry among sugarcane farmers countrywide.
Farmers say they are finding it increasingly difficult to sustain their activities because while the price at various sugar mills keeps dropping, the cost of production remains high due to the rising cost of inputs.
Under Mukono Outgrowers Cooperative Society Limited, they cited urea fertilisers, which now cost sh160,000 for a 50kg bag, up from sh110,000 last year.
They added that the cost of hiring land, purchasing seed cane, ploughing, herbicides and labour, have all risen.
Julius Katerevu, the chairperson of the cooperative society, said as a result, the venture has become unprofitable and several group members have lost property due to their inability to service the loans they acquired to invest in sugarcane.
Producing a tonne of sugarcane, he argued, costs a farmer between sh200,000 and sh240,000, yet the same tonne goes for sh150,000 at the Sugar Corporation of Uganda Limited sugar factory, which is the highest price in the market.
Kakira Sugar Limited currently pays farmers sh132,000 per tonne, down from sh170,000 in April, while other factories pay between sh100,000 and sh140,000, according to sources in the industry.
In Bunyoro sub-region, Robert Atugonza, the chairperson of the sugarcane outgrowers, said Kinyara Sugar Factory pays sh134,000 per tonne, down from sh160,000 in January this year and sh181,000 in December last year.
This, according to farmers, is a drastic reduction considering that the price for a tonne of sugarcane once rose to sh250,000 last year before it began dropping.
“Sugarcane growers are operating at a loss of sh83,000 to sh140,000 per tonne, which makes the business stressful and untenable for the growers,” Katerevu said during a meeting of farmers in Lugazi, Buikwe district on Friday last week.
He said millers extract between 100kg to 150kg of sugar from each tonne of sugarcane supplied, noting that other by-products, such as spirits, molasses, electricity, carbon dioxide and manure, are never considered when paying suppliers.
“It is believed that millers earn close to a million shillings from each tonne of sugarcane, while the farmer earns 10% to 20% of the gross revenue from his produce supplied to the millers,” he said.
Katerevu who said the greater Mukono region consisting of Mukono, Buikwe, Kayunga, and Buvuma districts has an estimated 10,000 sugarcane farmers, regretted that requests for engagement with the Uganda Sugar Manufacturers Association over the matter, have been futile.
John Masanso, a farmer in Najja, Buikwe district, regretted that, despite the value of sugarcane and its role in the economy, including employment creation and taxes to the treasury, the sector is despised by leaders at the national level.
“Sugarcane farmers are required to possess harvest permits, unlike colleagues elsewhere. Surprisingly, you can process a permit and harvest at a given price, but by the time you deliver your produce to the mill, you find a different price,” Norah Nakidde, another farmer, complained.
The farmers want government to come up with clear legislation that will regulate the industry. According to Katerevu, although government came up with the sugar law which provided for the establishment of a sugar board, this was shelved before its implementation.
Issa Budhugo, the chairperson of the Uganda National Association of Sugarcane Outgrowers, in an interview, said there are plans to reintroduce the sugar Bill to Parliament, but wondered why stakeholders were not being consulted for their input.
In response to farmers’ grievances, SCOUL deputy general manager Wilberforce Mubiru said factories were forced to cut prices due to high operational costs as a strategy to stay afloat.
